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Deposits grow, as does ECB pressure on local banks

Confidence is slowly building among bank depositors, as figures for September showed an increase in the Greek bank account balance, but local lenders are now under pressure to step up the pace in tackling bad loans.

According to bank estimates, deposits grew by almost 1 billion euros last month, following a 1.45-billion-euro rise in August and an 843-million-euro increase in July. Officials in the sector have told Kathimerini that the tension in recent weeks between the European Central Bank and the International Monetary Fund on the local credit sector did not affected liquidity.

On Wednesday the ECB clarified that its demand that banks set aside funds to cover 100 percent of nonperforming loans (without collateral) will only concern new NPLs, created after December 31, and not the existing stock of bad loans.

Nevertheless, bank sources told Kathimerini that this does not translate into any letup from Frankfurt as regards existing bad loans, as the NPL portfolio will be re-examined in the first quarter of 2018 and any decisions on interventions will be made then, as the ECB statement also states. Bank officials say, this way, the regulator is putting extra pressure on lenders to take more decisive action on NPLs.